Canadian Business Optimism rises: BOC

Business optimism in Canada rose sharply in the first quarter, with executives expressing markedly improved sentiment toward hiring and spending.

The Bank of Canada’s quarterly Business Outlook Survey is a good sign for Canadian workers, who are eying better labour market prospects in the early spring. Canadian employers added 42,900 jobs last month, while the unemployment rate dipped to 6.9 percent, Statistics Canada reported last week.

The quarterly survey captures the business outlook in Canada through the eyes of 100 executives, who share insights about the short-term economic situation.

According to the BOC survey, stronger sales and brighter business prospects are expected to keep hiring elevated over the short-term. Hiring intentions among executives was the highest in almost two years, the quarterly report showed. More than half of the 100 survey respondents said they expect to be hiring over the next 12 months.

Somewhat surprisingly, respondents also indicated a decline in labour and skills shortages, which have been a chronic issue in the Canadian labour market.

The Canadian dollar was trading higher in the late afternoon session, after dipping to an intraday low of 0.9082 US cents. As of 19:30 GMT, the Canadian dollar was trading at 0.9116, up 0.1 percent.

Statistics Canada will report on housing starts and building permits Tuesday. Stronger than forecast data are likely to keep the loonie elevated in the middle of the week. Statistics Canada reported solid GDP and trade data last week, which helped boost sentiment in favour of the loonie leading up to Friday’s employment report.

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